We’ve done a lot of consulting work in the past, covering a wide range of topics in the realms of credit repair, debt relief, and personal finance as a whole.

Recently, we were approached by a dating website, Vali-date.net, asking us to consult on identity and profile verification.  The site, which should be launching by the end of the month, wants to make a name for itself by validating your dates.  That is, actually running background checks on its members before it sets them up to meet.  Nothing too comprehensive; the site claims they won’t be requiring a blood sample, just verification you are who you say you are and whether or not you really DO have that summer house in the Bahamas.

It’s an interesting concept for an online dating site, requiring validation from both parties before they attempt any sort of meaningful matchup, and one that makes perfect sense for today’s  scam-conscience society – where some couples go so far as to check each other’s credit histories before committing to a serious relationship.  

Now more than ever, you should protect your information – especially on Dating Websites

There was a time when you only had to worry about as far as identity protection was some ne’er do well stealing your ID and claiming it as their own long enough to empty your accounts into theirs.  Now we have to worry about potential significant others leafing through them before they get to know us better?  Hell, the first date could be over before the first course of a meal!

With your romantic future in mind, not to mention protecting your identity as well, here’s a list of steps you can take to insure your identity makes it past first base:

• Clean out your wallet.  Try to carry only one credit card, and leave your Social Security card at home.  • Don’t carry any pay stubs, shred your receipts when you’re done with them, and obviously don’t write your PIN number on a cocktail napkin and forget about it.  

• Reduce your paper bills and switch to banking and bill-paying online.  Doing so will result in your statements being sent to your email.

• Review your credit and bank statements every month – if anything on them looks off, contact your provider.  

• Always require photo ID verification.  Write “See Photo ID” on the back of all your cards to make sure anyone who wants to swipe your card makes sure it belongs only to you.

• Shred all credit card offers, bank statements, and anything with your personal information listed on it.  

• Check into software to set up firewalls and run checks every couple of weeks for spyware and viruses.

• Be very wary of where you shop online.  If a site looks particularly suspicious in any way, it’s probably best to find what you’re looking for elsewhere.

• Don’t leave your credit card information online, even on sites you may frequently shop at, like Amazon or Best Buy.  You’re better off taking the extra couple of seconds to enter your card numbers in from scratch whenever you wanna buy something.

• Limit access to your computer.  Put passwords on every one of your accounts, and keep them to yourself.

Keep these tips in mind and you’ll not only have gone a long way towards protecting your wallet, and even perhaps, scoring your way towards home plate.

The problem now becomes a choice of which type of credit card is best for the client to build their credit back up as quickly as possible.  More than a few immediately think to sign up for a retail credit card with their favorite shopping outlet. 

And why not?  Just about every one of these stores offers some kind of incentive to sign up for their credit card on the spot.  I was at Barnes & Noble the other day, picking up a couple of books, and was offered 15% off my purchase today if I signed up for their credit card.  A tempting offer to be sure, but I ultimately decided to pass, and the next time you’re presented with a similar offer, you might want to as well.  Why?

• High interest, low limits.  Most retail chains that offer their own credit cards try anything they can to get you to sign up on the spot, including offering to take as much as 20% off your in-store purchases then and there.  But while the immediate savings may sweeten the deal (especially if you’re already seriously considering the offer because you shop there a lot), you might be regretting the decision in the long run.

Store credit cards generally start you off with a ridiculously low credit limit – usually no more than $500, meaning if you got a Best Buy credit card and plan on using it to pay off that new LED TV you’ve been eyeing all year (I’m right there with you), you’ll drive your credit utilization ratio into the stratosphere, which will drive your credit score into the ground. 

They then follow that up with interest rates that can go as high as 30%, meaning if you make any big charges to your new account and don’t pay it off before the end of the “grace period” many retailers provide, you’ll be facing major interest charges, which can make saving a couple of bucks on your last DVD purchase seem a little less worth the effort.

• They’re really only good in that store.  Yeah, you’re probably not going to be able to pay your cable bill with your Barnes & Noble store credit card, or book a cruise with your JC Penny card.  Store credit cards are only really useful in the one store, and once you step outside they tend to lose their worth.

• They don’t even have as much influence on your score.  While it’s true that having a positive payment history looks good on your credit report no matter what, store credit cards don’t have as much influence on your credit report as other credit cards.  Combined with the high interest/low limits structure, and the fact that they’re essentially glorified gift cards, you can certainly find better options when you’re looking for a good credit card to fill out your history.

While it’s true that everyone’s situation is different and you can’t really pin the blame for any one person’s financial strains on a universally-applying cause, there are at least a few main factors we can all point to as a reason our wallets all look a little too thin these days.

Cuz we are living in a material world…

Ah, consumerism.  Many people like to point out money itself as the root of all evil, but that same hive mind is posting that on their new iPad while sitting comfortably on their faux leather couches, watching their new 60” LED TVs and downloading apps on their new iPhone 4 before they head outside to wash the car they picked up last week to replace the one they leased two years ago.

My point is, the money itself isn’t so much a problem as is the culture of consumerism we’re funding it with.  Every time some hot new product launches, especially a new cell phone, people line up to be among the first to purchase it.  Apple fans know a thing or two about consumerism – just look at every product Apple has launched since the iPod.

Consumerism by itself isn’t necessarily bad, if kept in check.  However, when it’s taken to the extreme – when people start dreaming far beyond their means, buying their dream houses and cars without a thought of how they’ll actually pay for them – well, that’s when we all run into a huge financial roadblock.  But not all our problems can be pinned on the fact that we’re all lemmings, can it?

You lack discipline!

People may buy an iPhone 4 because they’re told it’s the best thing to happen to us as a species, but you can’t solely lay the blame for that on Apple’s marketing department; after all, they’re not holding a price gun to your head and forcing you to buy it.  

No, the problem here lies in our completely frivolous spending habits.  When was the last time you were out running errands, and decided to pick something up that you didn’t need, just for the hell of it?  I’m not talking about a major purchase (although those certainly apply).  I’m talking about driving past a McDonald’s and pulling into the drive-thru for a Frappé, or stopping to grab a Starbucks coffee every morning, or snatching up a movie off the shelf at Best Buy because you want something to watch tonight.

These kinds of purchases seem miniscule in our day-to-day lives, but as anyone who’s made too many of them and then felt the sting hit them hard when they get their bank statement at the end of the month knows, those purchases do come back to bite (and yes, that’s a bit of personal experience talking).  A little discipline, along with the ability to make our own coffee and pack our own lunches, could go a long way towards getting our finances back on track.

You gotta spend money to make money!

And now even the US government is encouraging our spend-thrifty ways!  After all, the only way to dig our economy out of the pit we put it in (though they won’t put it like that), is to fuel it back up with our money.  So don’t hold onto your money in a mattress or in the crawl space in your attic, spend it!  After all, who better to tell us how to turn our economic and financial hardships around than a bunch of people who have never actually run companies in their lives and who, whenever the subject comes up in the news or on talk shows, dance around the subject like a man with two left feet dragged out to salsa dance classes?  

These people demonstrate on an almost nightly basis they have no clue how to get us back in the black.  Hell, just look at the fact that you can deduct mortgage interest from your taxes, and then having to turn around and pay taxes on the interest.  Don’t save it, spend it!  It’ll make you money and save the economy somehow!

You don’t need to conform to the same lack of discipline that got us into this mess though.  If you’re personal finances aren’t where you’d like them to be, and your credit is suffering for it, give one of our specialists a call on that brand new 4G phone.

Then I noticed something quite odd about the name on the envelope.  It wasn’t addressed to either of my parents at all – it had MY name in the box.  My first credit card offer!  Forget being able to legally vote, buy a pack of cigarettes, or getting into an R-rated movie without parental supervision; NOW, finally, I knew I had “arrived.”  I was all growed-up.

And I’d be damned if I was going to ignore all these nice companies who were tripping over themselves for the chance to give me a credit card.  

Even my parents were beside themselves.  When they stopped laughing long enough for me to ask what was so funny, they simply said, “Don’t spend it all in one place.”  I didn’t, and I had the credit card debts to prove it….

Just sign on the dotted line

You’d think that, to an average 18-year old kid who doesn’t know jack about credit, a simple credit card offer would be more than enough to make their day – especially if they’re still asking their parent’s to pay for something by check or card when they say they don’t have the money on hand for it because, “it’s like free money anyway, right?”

But banks and credit card companies won’t just stop there; they’ll do anything they can to get you in their pocket, including offering bonuses for simply signing up.

If you’ve received any credit card offers in the last few years, you know how awesome (read: superfluous) these offers can be, especially to an 18 year old kid with no real money in the first place.  I mean seriously, it seems like every other credit card offers airline tickets or miles with each $1000+ purchase.  Who’s really going to cash that in during times like these?

Not all offers are created equal

But I digress.  You see, not everyone gets the same credit card sign-up bonus that you might be offered.  Banks are kinda sneaky like that – they’ll offer the exact same card to two different people, but with completely different rates, terms, and bonuses.  One man’s lower interest rate is another man’s airline miles, so to speak.

To illustrate this point, let’s take a look at a couple of credit cards and compare their sign-up bonuses:

• Discover More Card.  In addition to receiving an extra $75 (up from the previous $50) for your first $500 in purchases – within the first 3 months, or no money for you – you also get 0% APR for six months on purchases (after six months, the APR can go anywhere from 12% to as high as 20%) and no annual fee.

• Citi Dividend Platinum Select MasterCard.  Instead of a cash bonus of $75 dollars after your first $500 in purchases, this ridiculously-named card offers 5% cash back on restaurants, car rentals, and hotels (but only until Sept. 30, 2010) as well as additional cash back bonuses on select purchases.  0% APR for 15 months (after which point it falls between 13% and 20% as well) and no annual fee round out this card’s list of features.

That’s just two of the many credit cards out there offering sign-up incentives.  As you can see, both cards offer similar interest rates, but where you fall in that spectrum could be wildly different depending on where the offer is coming from.  A mail offer may promise a free airline ticket at the cost of a higher rate, while an online bid for the same card may come with no plane ticket, but lower interest as well.

The moral of the story

Don’t immediately rush for a pen or hit the “auto fill” button the next time a credit card offer comes in the mail or pops up on your screen.  Take the time to research all the card’s features beyond just airline miles or cash back bonuses that run out in a few months.  Choosing the wrong card could backfire if you’re just as careless with your money, and then you’ll end up in need of serious debt relief.  Then you might not feel quite so “growed-up” anymore.

Well here’s a little bit of good news for those of you searching for debt relief or a chance at credit repair: the New York Federal Reserve recently released their quarterly report  detailing the nation’s household credit and debt and it seems that there’s some good news hidden in there – not much, but some.

The Good

According to the report, a greater majority of Americans are actually current on their debt payments rather than behind.  Auto loans are up by 25%, and while many consumers closed rather than opened credit card accounts in the last year, the amount of credit account inquires rose for the first time since 2007.  

The Bad

Unfortunately, the report came with less than cheery news as well.  More and more people have foreclosures weighing their credit reports down – close to 500,000 people according to the report, nearly a 9% increase from the first quarter.  Bankruptcies rose as well – up 34%, meaning 621,000 consumers have a BK on their reports.

The Future

While the news of rises in foreclosures and bankruptcies isn’t exactly a sight for sore eyes (or wallets), the news of a rise in auto loans and credit inquires is a clear sign that the majority of consumers are ready to test the financial waters again, albeit pretty cautiously.  

Most people are in fear of joining the growing unemployment ranks, and so will keep their credit and checkbooks on lockdown unless absolutely necessary.  But they can only curb their spending enthusiasm for so long before they have to break out the cards for something, and that will be the key to kicking the economy back into gear – even before companies start hiring again, according to economists.  

And with our national debt slowly (and I mean slowly) declining, consumers may be ready to take their wallets for more than just a financial necessity.

Today, I thought I’d briefly touch on what might be considered a “good” debt over all the bad ones – kind of the same as good vs. bad cholesterol – and how to avoid the bad ones so you don’t fall too far into a money pit and wind up in need of serious debt relief.  

Bad debt

Let’s start with the obvious: debts that you don’t want to find yourself in.  Most people will probably tell you that any type of credit card debt is automatically bad, and they’re not necessarily wrong, but that doesn’t mean they’re right on the money either.  

Think about what you use your credit card(s) for.  If you’re like a lot of people these days and tend to break out the plastic for every purchase you make, from gas to clothes to a night at the movies and don’t pay off the balance in full each month, you’re already making a lot of headway on the highway to bad credit.  Before you know it, you’ll end up with a bill upwards of $600 for a bunch of items you could have SWORN didn’t add up to that; it’s gotta be a problem with their math, that’s all.

Bad debt doesn’t just stop at the checkout counter though; many people get into bad debt when they decide to use their credit cards to fund even something that might be good for them, like a vacation.  Now, I’m not about to say you shouldn’t take a vacation – God knows I could use one.  What I am saying is that you shouldn’t rely solely on your credit cards to carry you through that Caribbean cruise or Eurotrip without first planning for the trip and what you’ll be spending on it.  

Simply put, if you can’t afford a big vacation like the ones I listed (hell, even something like going to Disneyland for a SoCal resident can drain your available funds faster than you can say “I think we’re parked in the Goofy lot”) with your available budget, consider dreaming a little smaller, or at least putting it off until you have the funds for it.

Good debt

These are all obvious examples of debt that’s gone wrong, but what about a good debt?  Is there even such a thing as owing money for a good cause?  A good debt can also been seen as something of an investment; one that you can actually expect a return on.  The most immediate example of a good debt is a student loan.  Higher education is always important and can usually lead to higher paying jobs, meaning you’ll be able to take care of your student loans over time.

You could also consider buying your home a good debt or investment.  And with the market in the slump it’s in now, it can be easier to get in at the ground floor and wait for the property to appreciate.

How do you tell the difference?

If you noticed the Bad section outweighs the Good portion of debt, that’s because it can be incredibly easy for a debt taken out with the best intentions to go sour real quick if you don’t keep an eye on it.  If you just skimmed the rest of the article, I’ll lay it all out for you here:

A good debt is something of long-term value, like a house or an education.  A bad debt is anything you buy that you basically can’t afford to pay for then and there, and won’t see an appreciation in value.  If you find the majority of your debts are falling into the “bad” crowd and you’re in need of credit repair services, give one of our specialists a call to set the record straight.

Originally signed into law by President Obama last year, the new laws were designed to end many of the not-so-customer-friendly practices in the credit card industry, enhance consumer disclosures, and provide some added protection to cardholders under 21. The law was scheduled to roll out in 3 phases, this Sunday being the last installment.

Here’s what the final phase of the CARD Act means for you:

• Any and all penalty fees that you may incur are now required to be “reasonable and proportional to the omission or violation.”

• Creditors must now periodically review all interest rate increases starting in January 2009, and must work to reduce rates when “warranted.”  (What warrants a warrant?  Currently it seems that’s open to interpretation, so if you’re looking to try your hand at fixing credit, make sure you’re up to date on your accounts.)

• Card issuers are no longer allowed to charge a penalty fee of more than $25 for late payments or any other violation of the card’s terms unless the consumer has “engaged in repeated violations or the issuer can show that a higher fee represents a reasonable proportion of the costs it incurs as a result of violations.”  So, don’t be late on your bills if you want to avoid slipping into credit card debt.

• Your credit card issuer is also no longer allowed to charge penalty fees that outweigh the dollar amount associated with the consumer’s violation.  So if you’re late on a $50 payment, your card company can no longer charge anything above $50 as a late fee.

• Finally, the new CARD Act wipes out any service fees on gift cards that have remained inactive, and requires to the cards stay active for no less than 5 years.  That means that McDonald’s gift card your favorite aunt or uncle sends you every year for your birthday is probably still good to go.

Here’s a quick rundown of what was included in the first two phases of the CARD Act:

• Card issuers are now required to give 45 days’ notice before they roll out any significant changes to your account or interest rate.  They’re also no longer allowed to impose any arbitrary increases to your interest rate.

• The CARD Act also prohibits creditors from charging fees for going over your credit limit unless they allow you to complete those over-the-line transactions.  One more reason to keep your card balance below 30% of the available amount.

• Any payments you make to a card that’s above the minimum required payment for the month must be applied to whichever credit card carries the highest interest rate.

• Any time your card company plans on raising your annual percentage rate, they must now notify you as to why they’re doing so.

• If you’re under 21 and want to get your hands on that shiny new piece of plastic, plan on bringing along a parent or guardian willing to take responsibility for any outstanding debt you may well (read: probably will) accrue if you can’t pay it off yourself.  Either that, or prove that you’ve got the means to take care of the card on your own (i.e., proof of employment) and that card is yours.

These are your rights under the Credit CARD Act, designed to better inform of and protect you from those dastardly credit card companies.  If you find you’re still in need of credit repair services, give one of our specialists a call.

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Yes, you read that headline right – our student loans have finally managed to surpass our credit card bills in outstanding debt.  According to figures from the Federal Reserve in June of 2010, consumers collectively owe $826 billion in revolving credit.  That’s billion, with a B.  If that doesn’t prove Americans are in desperate need of debt relief, I don’t know what will.

Not to be outdone, outstanding student loans both federally and privately funded now ring up to a total of $829 billion, according to FastWeb.com.  And I thought I was overcharged for textbooks when I was in college.

Textbooks vs. checkbooks

So how did student loans manage to surpass credit cards as Americans’ biggest running tab?  You might blame the fact that unlike credit cards – where what you see on your statement is what you get, and too many bad decisions can leave you scrambling to fix bad credit – student loans are slow to burn, accruing over many semesters and trips to the bookstore and financial aid building, until you finally are ready to graduate and you’re left with a gigantic bill to go with that sheepskin.

It could also mean a shift in priorities for many students trying debt management by concentrating on paying off their credit cards first as a means of getting out of debt quicker.  Because most credit card companies continue raising their minimum monthly payments, and credit cards tend to carry higher interest rates than student loans, many consumers who are stuck with both bills are choosing to focus more on their credit card bills, lest their scores fall lower than their grades and they wind up in need of credit repair services. 

Paying with more than just your lunch money

People are also more willing to borrow money for their education than they are to spend on their credit card.  With tuition at both private and public 4-year universities going as high as $26,000 as of last year, many students and parents are taking out loans in droves.

Student loans are also very difficult to include in a bankruptcy; they typically can’t be discharged because of the wealth (no pun intended) of repayment options.  According to FastWeb.com, only 29 out of 2,880 borrowers who tried to discharge their loans through bankruptcy were successful, and of those many only had a part of the loan discharged, not the whole bill.

So whether you’re about to send your kid off to college or you’re thinking about taking some classes again yourself, be careful how much you’re willing to borrow.  It may be a slow burn when compared to the sting of your credit card bill, but it’s a burn nonetheless.

Just sign on the RX

Apparently, a number of medical practices in New York are urging their patients to apply for health care credit cards, so much in fact that the New York Attorney General has started an investigation into the practices.  Health care credit cards act just like a regular credit card, but what makes them unique is they allow you to pay for medical services, many of which are not covered by your health insurance.  

Patients who do sign up for the card are often offered interest-free plans as well as up to 48-month payment plans.  It seems the doctors offering them are getting a bonus as well in the form of financial incentives for every patient that signs up.

Great, so now I have to hear my doctor give me credit card sales pitch before he fills out my prescription?  “We’ve got the results of your blood work, but before we get to that, how’d you like to hear about the new interest rates we’re offering?”

Getting a lot more than you need; now THAT’S health care

The Attorney General isn’t too thrilled with the idea of doctors pitching credit cards either, not only because it presents a clear case of conflict of interest, but also because they believe many patients are being goaded into applying for these cards without being given any disclosures or even knowing they’re signing up for a credit card, possibly until they start receiving past-due notices and find they need help fixing credit.

Imagine needing an important medical procedure done and signing up for a payment plan only to find out you’ve just applied for a credit card – without knowing any of the details like finance charges, APR, or even what the late fees will be.  Having a new card open in your name and not knowing a thing about it would sure make finding debt relief harder when you receive a bill for the operation and find all kinds of interest fees tacked onto it as well.Watch what you’re signing up for before it ends up costing you more than an arm and a leg.  While these health card cards may hold some benefit in helping pay for anything your insurance won’t cover, they certainly aren’t worth the price for the common cold.

Related Reading:

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Okay, so that’s actually 3 different questions, but they all highlight just how confusing the credit score model is to consumers who are just trying to learn how to fix credit so they don’t have to worry about a seemingly arbitrary number determining whether they’ll get the best rates on a loan or wind up in need of credit repair services until they can raise their score high enough to hop on the ride with the rest of us.

But in order to do that, we’ll need to take a look at the top credit scoring systems, FICO and the newer, lesser-known VantageScore model.

For the longest time, FICO was the only credit score you needed to know, and the only score you needed to worry about if your credit history wasn’t up to snuff and you found yourself in need of debt relief.  Now, under the VantageScore system, many who have found that their otherwise top-notch credit rating doesn’t seem quite as high as FICO would have them believe.  

Many who thought their score was untouchable are now seeing a new number lower than the other one and fear they’re now suddenly being deemed as more of a potential credit risk than they really are.

So what’s the difference?

There isn’t one, at least not a major one.  Most people who have looked into their FICO score will find a similar number in their VantageScore as well, no matter how high or low their actual credit history may be.  If one number is slightly higher than the other, it doesn’t necessarily mean you’ve suddenly become a credit risk to lenders and creditors.

One reason for the difference in digits between the scoring models is VantageScore claims their credit score offers a distinct advantage to those who have a smaller credit profile – that is, people who don’t have a lot of credit accounts in their profile, or who don’t use the lines of credit they have open to them as often as they should.  By placing this much emphasis on the individual credit tradelines, it becomes a little easier to see why someone’s Vantage score is slightly lower than their FICO number.

At the end of the day, one isn’t necessarily “better” than the other (though most lenders and creditors still stick to the FICO model).  If you have good credit with one, you essentially have just as good a score with the other and the same holds true for bad credit as well.  The real concern should be removing negative items from your credit report and raising the numbers themselves, rather than which is better than the other.

So off we went to the Magic Kingdom, splitting our time between checking out all the rides we loved as kids and waiting in line to actually ride them.  To be fair, the weather was certainly nice, so we didn’t need to brave the 80+ minute wait-time for Splash Mountain at all.  Nor did we care to brave the lines to get a picture with Mickey – one of which actually stretched across Main Street USA.

Something else I wasn’t too thrilled about when we got to the park: paying $75 for a ticket to get into the park itself, plus another $15 for parking.  When you throw in the inevitable cost of food in the park ($13 for a sandwich?!), and the obligatory souvenir (because let’s face it, you don’t get to leave the house that Walt built without picking up some trinket to commemorate your time there), and I was left with a bill that was even more wild than Mr. Toad’s ride.

My point in all this isn’t so much to brag about how awesome my weekend was compared to, say, yours but to illustrate how hard it is to find debt relief when everything’s so damned expensive these days.  The last time I went to Disneyland was sometime in the mid-90s with my family of four – the total cost in which was barely more than $100 for all 4 of our tickets.  Today, $100 will buy one adult tickets to both Disneyland and its sister park, California Adventure.

The Times They Are A-Chargin’

Now, I realize Disneyland is a pretty extreme example of how far we’ve come in the pricing wars (after all, I doubt anyone could make a convincing argument that going to a theme park qualifies as a necessary expense) but after checking my credit card statement today and seeing the damage the House of Mouse did to my card, it certainly illustrates how easy it is to slip into credit card debt these days.

I may have chosen to lump my major spending into a single day, but there are some out there who mistakenly believe that spreading the same amount of bills out over multiple cards is a great form of debt management; that using a different card for each purchase will somehow help them in getting out of debt. 

Unfortunately for them, spreading your debt among your available credit cards makes about as much sense as a cartoon duck that takes the time to wrap a towel around his waist, yet never wears pants.  In other words, it doesn’t make any lick of sense.  Spreading your charges across multiple cards will only add to your frustration when the bills come in and is hardly the best way to improve bad credit. 

How to improve your credit fast

If you’re looking for the best methods to improving your credit score and have found that simply dragging your charges out over multiple cards hasn’t worked in staving off the bills as well as you had initially hoped, or you find that your efforts to fix your credit score in the first place have so far proved ineffective, you might consider outside credit counseling in the form of credit repair services. 

I know what you’re thinking, “A credit repair services company telling me to consult a credit repair company on how to fix credit?  Well, I never!”  Well, if that’s true, there’s certainly no time like the present to get back in the credit game so you can go about removing negative items from your credit report and find your way back on the road to financial freedom.

A good credit repair company works with you to not only fix credit errors but also help you with debt settlement options so you can work to pay down your debts so that they’re out of your hair for good.  Finally, they’ll help you achieve a fresh start on your credit history, and will educate you in the ways of using new credit to improve your credit so that you don’t fall into this money pit again.

After all, no one wants to spend a day at Disneyland and then spend the rest of the month (and beyond!) paying for it.  If you’re tired of having to put off fun trips like this because it’s just not in the budget, give one of our specialists a call to get started on improving your credit rating today.  There’s no wait times, and no height restrictions to ride this ride, so why not hop on now?

For many college-aged kids, being faced with the high cost of the college lifestyle all on their own, the simplest solution to their sudden seemingly huge and insurmountable funding problem is a small plastic card.  Of course, many students who try out their brand new credit card at the college bookstore could end up relying a little too much on it and, come the end of their first month out on their own, find themselves up to their stunner shades in credit card debt.  Just like a real grown-up.

Now, while those unfortunate students find themselves having to take remedial classes on credit card utilization, anyone who paid half as much attention to their spending habits as they did the cute brunette sitting in the row in front of them won’t feel the immediate need for debt relief.  Don’t fret too much though, if you do find your credit card bill dwarfs every other invoice you get this month. 

While you may have thought living on a strict budget of cash on the barrelhead was the only possible way to go (and an impossible path to tread at that, when you don’t really have any cash to speak of), there are ways to make it through college with your credit history intact.  Here are a few tips to help you get started:

• Cut the spending.  We’ll begin with the obvious step.  If you want to save yourself some time and the hassle of fixing credit, you can start by cutting any and all unnecessary expenses.  That means canceling the HD-DVR you ordered for your new digs and switching to store-brand cereal instead of the fancy stuff.  I know that probably stings (how will you stay up to date on True Blood now?!), but this is the easiest and fastest way to save yourself some serious cash.

You can save even more by reevaluating your living situation.  If school’s too far from home to make the commute, and all the dorm rooms are taken, gather some friends and consider renting a house.  You’d be surprised how much money you’ll save on a house by cramming as many people as you can into it.  Of course, that’ll likely cut down on study time quite a bit, but hey, that’s part of the college experience too.

• Screw the cards, switch to money orders!  If you can’t trust yourself enough to take a credit card with you out shopping (and who honestly could at that tender age?) you can handle big expenses like rent, car, and tuition payments with a money order.  You can find these for an extra dollar or two at most supermarkets or check-cashing places.  These are a great way to pay the bills you absolutely need to pay and avoid having to pay more for it later.

• The kitchen: Your new 4-star restaurant.  Get ready to switch from eating Panda Express to a ramen-only diet to save those duckets.  If you’ve never cooked a day in your life, make the Food Network your new favorite channel and start building a menu of your own.  Just don’t go too extravagant with the food items and cut back on the bags of junk food, and you’ll be able to keep your belly well-fed without breaking the bank.

• Everybody into the carpool.  Finally, we come to the biggest financial strain on anyone’s – not just college students’ – budget: gas.  If you’re living with a group of other students, you might suggest carpooling to school, assuming everyone’s class schedules are relatively close together.  Switching driving duties between housemates every day can save all involved on trips to the gas station.  Barring that, look into bus or train passes to save on gas money, or go full-on green and ride a bike to school every day.  Not only will this cut down on gas entirely, but you’ll get a good workout in too, and who at that age doesn’t want to look as fit as possible?

Keep these tips in mind when the bills start to roll in and they seem a little too high for comfort

It seems they’re not the only ones though.  According to a new study from credit card giant MasterCard and Lightspeed Research, many consumers with an average credit score of 650 or below (for reference, 650 is already pretty low) are switching to debit cards for a majority of their purchases as well.  The study shows that these consumers – who fall in the credit industry’s “subprime” credit category, having scores below 650 – tend to favor their debit over their credit cards roughly 28 times per month when making purchases. 

On the opposite end of the spectrum, we have the consumers in what the credit industry refers to as the “superprime” borrowers – they may not walk around with giant S’s on their chests, but they do brandish the next best thing: a credit score of 720 or higher (that’s pretty good, for reference).   What’s the difference?  According to the study, these consumers break out their debit cards only 11 times a month on average, and spend far less in purchases when they do — $324 as opposed to the “subprimes’” $860 each month).

Finally, we come to the middle ground of borrowers; the “primes.”  These people have a credit score that falls somewhere 650 and 720, and use their debit cards on average of about 20 times a month, and spend just over $600 on purchases each month.

And what have we learned?

I thought this was an interesting study that gave a bit of a peek behind the credit curtain at why some people have the scores they do.  Obviously I don’t think it paints the most accurate picture of someone’s personal credit history, but it is interesting to see the research back up the claim that those who are a bit more frugal with their funds aren’t as much in need of credit repair services as those who are. 

For those of you who aren’t too pleased to find yourself in the “subprime” category, our phone lines are open…

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This pleasant thought was almost immediately followed by a more disagreeable one: “Wait, no I don’t!”  Finally, before that considerably callous contemplation could coldly clasp my conscience, I concluded on a contented compromise: “My life is good, but it could’ve been much better. In other words I’ve made some big mistakes that almost ruined me”  

(Note to self: swear off word-a-day calendars.)

See, my life isn’t too bad when all is said and done, but I could’ve done even better had I not have made some stupid mistakes. I was so close to having everything in my life i ever wanted had I not made a small, immature mistake. And trust me, lesson learned it will not ever happen again under any circumstance.  

I’m sure I’m not alone in this sentiment at all.  But hind site is always 20/20 right?

Well, I’m done lamenting the past.  I’m back and ready to drop that excess baggage like it’s hot.  I’m super-fly TNT; I’m the guns of the Navarone!  And I’m ready to help not only myself take charge again, but all of you as well.

My New Book

I’ve got a book coming out this September.  Culled from over 10 years of industry experience, this totally tubular tome will feature one of kind tips that will cover the wide spectrum of problems and solutions dealing with all things credit and debt.  Having been in this business as long as we have, we’ve heard just about every situation and story you can think of, and I’ve used them to answer your most burning questions on credit repair, so you too can achieve debt relief and work towards a fresh start.

Call us if you’d like an advance copy at a 50% discount

Do it Yourself Software Release

That’s why we at My Credit Group have been developing a brand-new, first of its kind software in conjunction with a major credit bureau giving us the support we need to better help you improve your credit.  Designed from the ground up with you, the consumer, in mind, this one of a kind program will offer all the help you’ll need to repair your credit on your own in the best way possible.

It’s time to drop all that dead weight, and move on with life.  You want to do it, and we can show you how.

Now, while you’re up to your eyeballs in bills and looking for debt relief, it seems those ID thieves have moved onto a new tactic – cradle-robbing.  No, they’re not actually out to steal your firstborn; just their brand new and as-yet-untouched social security number.  

Many businesses online have started using computers to find unused social security numbers – typically those of children who haven’t even set up a bank account yet – then turning around and selling these untainted numbers under a new name to help people establish a whole new (and wholly fake) credit history, rack up a ridiculously high credit card debt, then just walk away scot-free.  Kinda like what Tim Robbins did in The Shawshank Redemption, but used for evil.

Obviously, such a scheme poses a very real threat to the credit system, but because the SS numbers used exist in a “legal grey area” according to authorities, the feds are still scratching their heads over how exactly to move forward on prosecuting those responsible for taking the baby’s candy.

So how exactly are they getting away with this?

If you’re like me, you probably spent the entire time reading that and wondering to yourself how the hell they were getting away with this in the first place, here’s your answer: they never refer to the social security numbers at all, but rather the CP – credit protection, credit profile, and credit privacy – numbers.  Using these numbers, the thieves are easily able to create fake credit scores and use them to obtain all kinds of deals and loans.  Think of it as buying a potted plant from a medical clinic vs. buying it from some guy on the corner.

The FBI only recently discovered the practice while investigating a mortgage fraud case in Kansas and is now scrambling to educate lenders on how easy it is for these operations to create an entire false credit profile with the information.  Because of the fly-by-night nature of these operations, though, it is difficult to determine just how widespread this practice is.

If the recent dip in Americans’ overall credit scores is any indication though – an average score of 599 is common now, and that’s pretty low – it could be widespread than you think.  With credit scores that low, more and more people are having trouble obtaining home or auto loans and even credit cards, leaving them in serious need of credit repair services before they can move on.

Who’s got your bits?

The scheme works by using computers to track down publicly available information and find completely random social security numbers.  Those numbers are then checked to see if they’ve ever been used to open any credit accounts.  If they haven’t, they’re then sold to the highest bidder, who can use them for whatever they want with no consequences coming back to them (unless they’re caught, of course).  The “best part” is, if the thief screws up on one number, they can simply move onto the next one in line.

Wanna make sure yours of your kids’ isn’t the next number they get a hold of?  Check your credit report periodically and stay in contact with your creditors.  As soon as something appears that looks wrong to you, have it disputed with the credit bureaus and give junior a fighting chance!

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Credit cards and teenagers can be a potentially dangerous thing when mixed together. Usually because teenagers see the limit on their credit cards as actual cash they’re getting. They might also think there are no penalties down the road. Educating your children on credit cards, and how they work might be beneficial, but that doesn’t mean that they’re guaranteed to listen.
Building Credit vs. Ruining Credit

Having a credit card can be great for college, or other financial duties that they might have but they should know that sometimes the interest on the cards is not worth it. Paying it back might also become difficult, and they might end up ruining their credit instead of building it. This is something that is happening to a lot of teenagers. ‘Mom, can I get a credit card for college, and to build my credit score?’ Mom says, ‘you have to be responsible with it, get a job, and pay it back when it is due.’ The kid gets a card, spends the money on it on a lot of electronics and games and fun stuff then come time to pay does not have the money.

Now their credit’s ruined and they’ve learned nothing. This is not true of all teenagers, but the ones who might think it’s free money, are the people that end up needing mired in debt. You need to make sure that your kids are safeguarding their credit score.  You want to make sure they’re getting the information and the facts prior to getting that credit card.

Tips to Keep Kids Out of Debt

• Get them only one credit card with a low limit.

• Never miss a monthly payment, but make sure you’re holding the kids accountable for their debt.  Simply bailing them out doesn’t teach them anything.

• Charge only one thing to the card, and pay it off before charging another thing to it.

• Only purchase items that you know you can afford in the future using the credit card. This will ensure that you can cover what you purchased, pay off the credit card, and booster your credit up in the process.

• If you’re in doubt about getting your kids a credit card, think about the consequences first. You should feel secure in how they’ll use that credit card.

• Remember that borrowing money from a credit card means that someone, be it your kids or ultimately you, is going to pay the amount back with interest.

Of course, it’s easy to talk about the importance of a budget.  Actually creating and implementing a strict set of guidelines is usually a whole different story.  But for those that embrace a disciplinary approach to budgeting, their financial burdens are lessened.

Understand Your Expenses

Before you can set a budget in place, you need to know exactly what your income is and what you’re spending that money on every month. Over the course of a week or two, write down every single penny you spend and what you spend it on.

The process can be time consuming in the beginning, but you will really benefit from the exercise. It’s much like tracking what you eat before beginning a diet — you must identify your strengths and weaknesses before establishing a plan of action.

What You Need vs. What You Want

After you’ve listed all of your expenses, prioritize them from most to least important. Ideally, things like rent and food will be at the top and entertainment will fall near the bottom.

Next, look for patterns. Are you spending a small fortune on daily lattes but consistently carrying a credit card balance? It’s probably time to re-evaluate your habit. You don’t have to give up the delicious drinks completely, just cut back in order to allocate a larger portion of your income to more important bills.

Divide and Conquer

Now that you have a better understanding of where your money needs to go every month, write down how you divide your income among your expenditures. After targeting all of your fixed spending like rent, utilities, insurance premiums, etc., keep what’s left over for variables like dining out, going to the movies and adding to your savings account.

If the numbers don’t work out perfectly the first month, that’s okay. You can’t predict the future. The great thing about a budget is that it can change. Make adjustments each month until you find a system that works well.

Build a Nest Egg

In addition to a solid budget, you should have a buffer in place in case an unexpected financial emergency comes up, and one will at some point. If you budget every dollar into a spending category without leaving some wiggle room for the unknown, you will end up in the red sooner or later. Plus, everyone should get in the habit of contributing to a savings account anyway.

The most important thing to remember when devising a budget is to keep it realistic. A budget should be a helpful tool, not a form of punishment, so be sure to allow for fun in addition to monthly bills. As long as you create a reasonable plan with both structure and flexibility, you shouldn’t have much trouble sticking to it.

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Back in my day, when I was a fresh-faced 18 year old out of high school, creditors seemed to be falling all over themselves for the chance to give to give me my first credit card, usually with a limit of up to $5000 (oh the ways I could spend that…) and some useless trinket as a sign up bonus.  Things are a little different now, the biggest change-up being that banks are no longer allowed to issue credit cards to anyone under the age of 21, unless the person applying has a cosigner or can provide proof of sufficient income.  

Now, I’m sure that probably sounded sensible to whoever came up with the idea, but back here in reality, it doesn’t make any sense at all.  Not only does it serve to stave off any experience a younger generation will have with credit cards, but with a decent percentage of your credit score (15%) made up of the length of items in your credit history, having to wait until you’re 21 to start building up your credit is like being held back two grades for no discernible reason.

So what’s a responsible teenager (responsible enough, anyway) to do if they want to get ahead in the game and start establishing credit before their 21st birthday?  Try out any or all of these simple tips:

• Get a secured credit card.  Think of a secured credit card as a set of training wheels; not quite a credit card, but more than a debit card.  You can get one from your bank after depositing some funds into the new account, and then use it just as you would a real credit card, making regular monthly payments.  Be sure to look for cards that offer lower interest rates than others; you don’t want to fall into the trap of barely paying the interest off this early in the game.

• Get a job.  If you’d rather jump head first into the pool, look for a decent part time job (or full time if you’re out of high school and want to wait a year or so before heading to college) to increase your chances of getting a credit card before you’re old enough to (legally) drink.  After all, being able to provide proof you’ve got a decent income that can be used to pay down a card balance is like doing extra credit assignments – it can only help in the long run.

• Piggyback on Mom and Dad’s card(s)!  Assuming either of your parents have credit on their own, and that it’s good, you can always try and hop onto their card and share in their good fortune.  Of course, if your parents start to slip up on their own credit, it’ll extend to you as well, so make sure your parents are better with money than you might be.

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Of course, that’s much easier to put in writing than it is into practice, and many people find themselves unable to stick to the budget they prepared for themselves for a multitude of reasons, some even beyond their control.

Here are some ways that budget you prepared to help you control your spending may not be working out as well as you had hoped, and how you can get it back on track.

• You’re spending more than you’re bringing in.  This is the most obvious and common problem people encounter, and the primary reason they set up a budget in the first place.  If you find that your net income is barely enough to keep you afloat every time the check comes in, now would be a good time to evaluate your spending priorities.  

• You’re just not sticking to it.  One of the things we always try and stress to our clients when they come to us for credit repair or debt settlement options is that the process doesn’t take place overnight; you won’t wake up tomorrow with a 720 score and lenders beating down your door to offer you the best loan imaginable.  The same applies to your budget.  You can’t expect to come up with one and then leave it to work itself out.  You’ve got to stick to it and refer to it on a weekly basis to make sure you don’t fall into any financial pitfalls.

• You’re not taking the time to get to know one another.  On the flipside of that coin, some people find that they’re budget isn’t working out for them, even after a monthly check up.  If you’re new to budgeting your annual/monthly income, it’s entirely possible – even probable – that you’ve not factored every bit of income and expense into your budget.  If you’re budget keeps coming up short, it could be because…

• You’re not adjusting it.  You shouldn’t think of your budget as a binding contract that isn’t open to negotiation.  On the contrary, you’re budget could see dramatic changes at any point in time, for any number of reasons (pay raise, job loss, marriage, baby on the way, etc.) and should be adjusted for these occasions.  If you’re not factoring these changes and others like them, into your budget, you’re only hurting yourself.

• You’re leaving out some details.  Here’s a serious slip-up most people make when setting up a budget for the first time: They forget to include every expense they make into it.  Smaller expenses are easy to overlook when creating a budget and are usually the reason you come up short when checking your spending vs. your income.  Refer to your bank statements every chance you get to make sure your numbers add up to theirs.

• You’re not having any fun.  One of the biggest detriments to setting up a budget for some people is they think it will rob them of any chance of spending money for fun.  This isn’t true at all.  Budgeting shouldn’t mean you can’t set some money aside for fun; it just means you decide ahead of time what you have to spend on what’s fun, and stick to it.

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Where Do I Start Repairing my Credit?

Your credit reports shape your credit scores.  All three of the major credit reporting agencies – Equifax, TransUnion and Experian – allow consumers to pull their reports every 12 months.  These reports are free, so there’s no excuse.

How Do I Read Credit Reports?

If you’re new to credit repair then the reports may be a little difficult to read.  They’re full of numbers, codes and abbreviations to ensure that they’re both consistent and kept as short as possible.  If necessary, find a credit repair services company that’ll give you a free consultation.  Not only will they explain your specific problems, but they’ll also give you an idea of what your plan of attack should be.

I Found Some Mistakes on my credit report, Now What?

You need to challenge anything on your reports that’s not 100% accurate.  Find a sample dispute letter, list exactly what’s being reported incorrectly and mail it to the credit bureaus.  This is a fairly slow process as it’s still being done through the mail.  Expect a turnaround of about 45 days and make sure that you’re keeping detailed notes of all correspondences.

Should I Pay My Outstanding Debts?

If you want lenders to see that you’ve paid off all of the money that you’ve borrowed, then yes, you need to figure out your debt relief situation.   While it’ll still be listed on your credit reports, the fact that it’s showing as “paid” will certainly help.

Why Isn’t My credit Score going up?

It’s generally a misconception that once you remove some inaccurate or outdated items and pay off some debt that your score should shoot right up.  Really what you’ve done is stopped your score from tanking. While removing negative information from your credit report does help, you need to establish new, positive lines of credit in order to maximize your credit score.  If you have no cards at all your adding a new revolving credit line can add as much as 60 to 80 points to your credit score.

What If I Get Stuck?

It’s not uncommon to hit speed bumps on the road that is credit repair.  There are plenty of people that have dealt with the same financial problems that you’re dealing with.  Again, credit repair forums can be invaluable.  Don’t be afraid to ask for help either.  Just because you can repair your own credit doesn’t mean that everyone is up to the task.  I’d like to build my own deck, but I know that my family’s safety says that I should get a contractor to do it right.

How Do I Know When I’m Done?

The truth is that you’re never really done with credit repair.  Every month companies report to the credit bureaus regarding your finances.  The obligation to make sure that they’re doing so correctly falls directly on you and no one else.  The credit bureaus won’t verify to make sure everything’s being reported correctly.

What Am I Waiting For?

There’s not going to be an engraved invitation in your mailbox.  You simply need to pull your credit reports and resolve to get all of your finances in order.  It may seem like a daunting task, but once you’re getting the lowest interest rates possible you’ll be glad that you started.

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